On August 1, 2023, newly imposed US tariffs led to a significant drop in cryptocurrency prices and stocks, triggering liquidations in the market.
Impact of Tariffs on the Market
The introduction of tariffs ranging from 10% to 41% on imports from 69 countries caused panic among investors. Crypto assets, including BTC and ETH, experienced a sharp decline due to renewed fears over the economic effects of these tariffs, reflecting on market liquidity and sentiment.
Financial Implications
Liquidations of long positions in the cryptocurrency market amounted to around $570 million. This event confirms that tariffs and macroeconomic factors significantly influence market sentiment. As Arthur Hayes, CEO of BitMEX, noted: "The market is reacting to aggressive tariff policies, and we are witnessing a sharp capital withdrawal from highly leveraged positions."
Market and Institutional Shifts
Despite the overall market decline, institutional interest is increasing, with a reported accumulation of 790,000 ETH by large holders. However, the general sentiment remains cautious amid volatility and uncertainty in the market.
The uncertainty surrounding the new tariffs continues to affect the landscape for crypto and equity assets. Investors are closely monitoring the situation's development.
